More Plants, More Problems?: California Shifts Framework to Regulate Hemp

California finally did what everyone else has been too cautious—or too conflicted—to do: it slammed the door on the hemp loophole. Governor Gavin Newsom just signed two bills that reshape how the Golden State handles both hemp-derived intoxicants and the struggling legal market that’s been bleeding out since 2018.

Goal Post

Assembly Bill 8 (AB 8) puts intoxicating hemp products—think D8, D10, and every synthetic cannabinoid cooked up in a warehouse—under the same roof as the state’s regulated market. No more gas-station gummies or mystery vapes. If it gets you high, it now has to be sold through licensed dispensaries with proper testing, labeling, and traceability. Newsom called it a “public safety move.” For most hemp operators, it’s a death sentence.

At the same time, Assembly Bill 564 (AB 564) cuts the state excise tax on legal adult-use products from 19% to 15%—a small, overdue concession meant to help licensed businesses survive. The governor framed it as restoring fairness to an industry crushed between high taxes and an unregulated black market.

Home Field

For the first time, the same plants are no longer competing on two different playing fields. The grey market—especially the online “D8” boom—will feel the squeeze. Stores and producers who’ve played by the rules might finally see a leveler fight, though whether enforcement will actually hold is anyone’s guess. Some hemp companies will likely fold; others will scramble to get licensed or leave the state entirely.

National Precedent

Every state’s been grappling with the same problem: hemp laws written for farmers being hijacked by chemists and marketers. California’s move gives other states political cover to follow suit—to merge the two industries under one compliance umbrella and treat “intoxicating hemp” for what it is.

If this sticks, you’ll see ripple effects across the country. Less of the Wild West, more structure, more oversight. Maybe even a step closer to national consistency. But in true California fashion, it’s not about morality—it’s about control, revenue, and survival in a market that’s been eating itself alive